5 business lessons from America’s pimps

Harvey Keitel (left) as Sport the pimp, with Robert DeNiro as Travis Bickle in Martin Scorsese’s TAXI DRIVER.

An Urban Institute study released Wednesday investigated the underground sex trade in eight U.S. cities.

An entire chapter of the roughly 350-page report focuses on the business practices and operational tools of pimping. Law enforcement officials call the financial and commercial transaction records the “Achilles heel” of prostitution and trafficking offenders. (Just ask Eliot Spitzer.)

Judging by the report, America’s pimps display much of the same entrepreneurial drive and mindset as those engaged in more legitimate enterprises on say, Wall Street.

“My main goal was always to make one million dollars,” one of the 73 interviewees for the chapter told the study’s authors. “I always had that sort of goal to aim for. It’d be one million dollars, then 100 million dollars, then a billion … I never got there, obviously, but I got to a million, in about the first six months.”

Like other businesses, the sex trade has been transformed by the internet and social media. “Really, the Internet cost me my freedom,” another interviewee said. “I would never have known. The Internet is a lot more dangerous than a girl working the street. There is more money, but you have to set up, and you can be tracked too hard on the Internet.”

Having accumulated some assets, some pimps interviewed in the study became a source of venture capital for others:

“You have people that are going to call you and say, “Hey man, I am trying to start a rap group.” I reach in my pocket, and maybe give $2,000 or $3,000,” another interviewee said. “I was always trying to find a way to help someone invest with a little bit of interest. That’s how I got my restaurant.”

And getting paid is always a challenge:

“The thing about the credit card is that most companies won’t give you credit cards for an escort service, so they would be billed as a cleaning service—Elite Cleaning Service—or something like that.”

Transportation costs are also a persistent concern:

“Interviewer: Would you rent cars?
Respondent: Yeah, I don’t take my cars out most of the time. Cars in one of girls’ names who had a license.
Interviewer: What rental car company?
Respondent: Enterprise, Hertz, wherever had cars available. If I rent a car, I’d get a Cadillac truck or Charger. They had more room.”

Here are five key business areas pimps interviewed in the report focused on, according to the study:

Advertising:“Pimps employed multiple tools to advertise the sex trade. Common methods and venues of advertisement included online advertisement, walking on the stroll, word of mouth, local print newspapers and phonebooks, business cards, and directly approaching customers in business establishments.”

Employee communication and record keeping:“Pimps maintained frequent communication with their employees by phone, text, and in-person conversation. Communications were intended to ensure employee safety, maintain control and oversight, and provide updates on business operations. Written communications, particularly texts, can make pimps susceptible to law enforcement detection, and many pimps utilized code or avoid written communication altogether to mitigate risks and evade the police.”

Pricing:“Rates varied dramatically across respondents. Price was most commonly determined by amount of time, single date, and/or sex act.”

Cost controls:“Operational costs: The costs of operating and facilitating sex work varied greatly across pimps, though this study identifies some common costs. Pimps routinely covered costs associated with employee housing, transportation, employee appearance and personal appearance, advertisements, and hotels and motels. Other business-related legal expenses included bail, and costs associated with arrests and prosecution on charges related to pimping.”

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